To think an annual property tax is incredibly unfair?

[Itchthescratch]

I come from an area with low house prices. It is great! My friends can generally afford houses even with lower salaries as the earnings:house prices ratio is better. Rents are also lower so they have proportionately more disposable income.

I have moved to a more expensive area where house prices are higher and people have really had to push themselves to buy a property. Salaries are higher but not high enough to make up the difference. They have had to pay more stamp duty , pay more interest and have less disposable income each month.

I am really struggling to understand why my friends in the South should also automatically be paying more property tax under the new proposals being suggested by Burnham supporters? What is the justification? They would love to buy a large detached house for £300k like my friends from home but this isn't possible. It feels like they are being double penalised.

Just to add house prices haven't risen in real terms in the area in live in now for 20 years so the value of my friend's houses is simply money they have paid in.

How does 5k per year work out if you are retired?

Apart from it being just a group of economists writing to the gov this stands out

“end the absurdity of a modest terrace paying proportionally more than a high-value mansion”
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It would mean that families stump up £5,000 each year to HMRC if their house is worth £500,000.

There are countless family homes in London that are a modest terrace, not a mansion, and £5k to £7k would be a lot with other high costs.

Downsize! There’s no stamp duty anymore! And on average pensioners have a higher disposable income after housing costs than any other demographic. If anyone can afford a £5k council tax bill it’s statistically proven to be them!

Great news! The price of large homes will fall making them more affordable to younger buyers. And with no stamp duty you can live there for the 15 or so years that you need a larger home then sell up and move somewhere of a more suitable size.

Great news if eg a family of four living in a modest London terrace can’t pay the tax?

Yes. Nothing. To indicate Burnham will follow this, let alone announce it imminently.

It also is in direct contravention of the fairer share proposals which we know favours. It's also not going to appeal to many working class voters to increase income tax and ditch inheritance tax, which is irrelevant to most people anyway. Only about 5% of estates attract inheritance tax, and statistically most of those won't be labour voters.

It sounds like scaremongering to me.

The point is that there are lots of people living in really modest houses that can't just pluck £5k out of thin air. They could be a working family that have recently bought, are in negative equity and have already been hit by rising interest rates. What is your advice to them? They can't afford to move and it would be so disruptive to do so when they bought a house that was affordable for them until the government implemented this stupid tax. It's pulling the rug from under people's feet. Whilst you might feel it's a good idea as I doubt you are impacted at all or you can absorb the tax but have some empathy for those that can't where this could be life changing and for what? What do they get out of this?

It’s a report telling Burnham what to do written by Burnhams policy advisors. But he could just ignore everything they’re saying but it’s not likely.

Thanks for confirming, I’m glad I read the link as that post sounded like a done deal.

Under this policy my council tax would triple. I still maintain it’s a vast improvement on what we have now. It’s unfortunate that you’ve stretched yourself beyond your means but taxes have to come from somewhere.

'Unfortunate'. There are so many different ways you can raise tax and you have literally no idea how this money will be spent. You are obviously just being goady seemingly welcoming high taxation for the sake of it.

The headline was provocative and ridiculous: ‘Burnham told to launch …’ makes it sound like AB is a low level employee or pawn of this group of economists. Then the wording in the article is much softer.

I don’t think AB is anyone’s pawn. The headline was intended to stir up trouble, which it obviously has with some of you. We won’t get anything like a 1% property tax this Parliament.

Inheritance taxes wouldn’t be scrapped though, they’d be rolled into income tax. Inherit a house worth £1m, pay income tax on that (I’d imagine it would be spread over 10 years or so). Why isn’t that fair? Wealthier people pay more IHT. Poorer pay less. We can scrap the IHT bands entirely and reduce loopholes used to avoid it. We need to start thinking about taxes differently, nor just immediately whining that it’s not fair.

@Bellic you are just here to agitate aren't you?

This has potential to be this government's poll tax moment.

It’s not high taxation though is it? It’s poor people paying less and those with assets and high earnings paying more. Why’s that unfair?

Not sure you do want to pay more tax, perhaps so some claim to on mn, but you can always voluntarily pay more to HMRC.

We've been through this SO many times it's boring. If you own a house with a large mortgage then practically you don't own much at all. If you own a cheaper house outright then you are wealthier. If you are in negative equity you are basically in a lot of debt and poorest of even if your house is worth a lot. These details matter and it's absurd to turn a blind to this when it impacts so many people.

Property tax isn't linked to earnings.

There’s no point me - one person - paying extra tax if it means that stamp duty still remains, massively damaging the UK economy.

Why? When so many people pay less.

These ideas all aim to do one thing that our current tax base fails to do - drive growth. Growth is vital if we’re EVER going to reduce the vast tax burden we’re currently paying. By the sounds of it of it we’re trapped in a low growth high tax environment as these policies aren’t understood and people are too short sighted.

Just to be absolutely clear, virtually no one's council tax is going to be costing them £5k+ under the fairer share proposals unless they moved with the policy in place and knowing those, and they'd have moved with no stamp duty.

I say virtually no one because a small proportion of people in the highest council tax areas, in the highest bands already pay that (band H in Dorset is over £5k). But many of those will still see reductions.

In London, a hand H in Westminster, for example, would be about £3200 a year under the new proposals, except for new people moving in. If that's too much for people living in an actual mansion, how on earth are people living in regular houses supposed to afford those council taxes now?

Well at the moment my flat in London is valued at £0 by banks due to cladding issues , i am paying £250 a month council tax so hoping my council tax will be £0 too with this new law he proposed, but i doubt it.

So Labour will be able to tax their way to growth?

You wouldn't be able to afford the massive mortgage unless you have a massive income in given affordability is a percentage of that income. No one is affording a million pound house on minimum wage are they?

If your council tax is 4k + now which does include homes that are not mansions in the North it will be in excess of 5k.